A New Way to Capitalize on Solar Benefits for your Co-op or Condo
If you live in a co-op or condo, you may envy your friends who own townhouses or single family homes because they have roofs on which they can install solar panels. Until recently, most co-op and condo owners had no easy way to directly supply their apartments with solar energy that was generated by solar panels on the roofs of their buildings. However, recent policy changes in New York State have enabled what we call a Solar Co-op. In a Solar Co-op, the power that the solar panels produce can be credited directly to a participating resident’s Con Edison bills.
Why Solar PV?
First of all, we’re talking about solar photovoltaics (PV), which directly convert the sun’s energy into electricity. The technology has been around since the 1950’s and some installed systems have been producing sustainable electricity for close to 40 years! There are no moving parts to these systems and the solar panels come with 25-year warranties. It’s a sound investment with minimal upkeep costs. The technology is overwhelmingly popular, with nearly an 800% growth in New York over the last 5 years. It also became the fastest-growing new energy source in the world in 2016.
Some of our larger real estate clients have even committed to integrating solar into every project when possible. A good friend of ours, Aaron Koffman, Principal at Hudson Companies, once noted a change in opinion from “solar being an interesting idea to solar being a no-brainer.”
Most co-ops and condos have separate electricity meters for common area and in-unit residential accounts. In the past, co-ops and condos could usually only use the electricity generated from the solar PV system to offset the common area consumption. But recent policy changes have enabled what we call a Solar Co-op.
In a Solar Co-op, the power that the system produces can be credited to both common area and individual residential meters, allowing each participating resident to reap attractive financial benefits directly on their Con Edison bills.
So what exactly is the direct value to you, an owner or shareholder of the building that has solar PV on the roof? Since residential electricity rates are higher, a Solar Co-op can increase the savings that a system will generate by 30%-40% compared to traditional common area projects. When combining the right incentives, tax credits, and annual system savings the average payback period for installing a system is 3 – 7 years.
Your Children and Grandchildren Will Thank You
So creating and joining a Solar Co-op is a smart financial investment, but, more importantly, it is a smart investment for the planet. What better way to demonstrate your values and concern for future generations than with a Solar Co-op? Oh yeah, and about those friends who moved to the suburbs – many of them probably found out that they had too many trees casting shadows on their roofs for solar panels to make sense, so you can make them a little jealous, too.
Is My Building a Good Fit?
The first question our clients ask us is, “how do I know if my building is a good fit for solar?” A good starting point is to find out the size of your roof and any surrounding obstructions. Do you have more than 2,000 square feet of available roof space? Is your building the same height or taller than adjacent buildings? Does your roof receive direct sunlight throughout the day? If you answered yes to any of these questions, solar may be a good fit.
If you have always wondered about solar for your co-op or condo, now is the time to ask questions and learn more. Our experts are leaders in the industry and can help determine if solar is a good fit for your building. Please get in touch!
Financial incentives for installing solar PV:
Part of what enables an attractive financial return on solar PV systems are the various incentives that are available to support the proliferation of this environmentally-friendly technology. Bright Power’s team of experts will work through all the complexities with you to make sure that you get the benefits. We’ve given a brief description of the incentives below, but please note these are periodically reduced in value and then removed from the market.
- New York State Energy Research Development Authority (NYSERDA) offers a cash incentive for PV installations
- NY-SUN Program (PON 2112) pays a cash incentive directly to the installer lowering the out-of-pocket amount cost
- New York State Solar Tax Credit is proportional to the cost of a 50kW project
- Federal Investment Tax Credit (ITC) is equal to 30% of the total project costs
- New York City Solar Panel Property Tax Abatement (PTA) offers tax abatements to the property owners that is applied to the property for a four-year period
- New York State Historic Property Tax Credit (HPTC) covers up to $50,000/calendar year/shareholder or the cost of the installation after the NYSERDA cash incentive
With the recent announcement of the tariff on imported solar cells and modules, solar energy has been in the news a lot lately. But what does it really mean and how will it impact you and your projects?
Thankfully, you will barely notice the impact of this tariff on the kinds of projects we do with you. As incredible forward-thinking clients, you know that solar decreases owner-paid utility costs, increases property value, produces clean greenhouse gas-free energy on site, and can add resiliency to the property when paired with storage.
Here are some specific reasons why we’re not too worried about the tariff:
- Solar panels are only one component of a solar project. Even if the full effect of the tariff gets incorporated into our pricing, it would not substantially impact the system’s long-term economic and environmental benefits. The 30% tariff is only on the solar modules and cells, so it would not increase the total price of a project by anything close to 30%!
- A number of manufacturers are petitioning for exclusion from the tariff, including our primary panel supplier, SunPower. Given that SunPower truly does have a unique cell and module design that is higher efficiency than any other (and which already sells at a premium price), they have a good case for exemption. This article from Greentech Media explains why.
- Imported solar panel manufacturers may eat some of the cost of the tariff. We’ve already spoken to manufacturers who have agreed to do so.
How Will This Tariff Impact You?
If you already have solar panels on your building, this will have no impact.
If we are currently installing panels on your building and the panels have already been ordered, your Bright Power account manager will be reaching out to discuss the specific plan for your project.
If we are under contract to install a solar project for you this year, and we haven’t yet ordered the panels, your Bright Power account manager will reach out to share all your options, including potentially expediting the process.
If we aren’t yet in contract, we will not be able to order the panels before February 7, 2018, the date the tariff goes into effect. We still don’t know the true extent of the impact of this tariff and expect to learn more over the next month. We do know that the 30% tariff does not mean a 30% higher cost for your project. At worst, the tariff will end up causing a small price increase that we will do everything we can to minimize.
How We See It
From where we are sitting, this tariff will not aid in the immediate increase in U.S. based manufacturing as it intends. Unfortunately, the media attention is already causing confusion and will slow down the growth of the industry and proliferation of solar. That being said, we fully support the creation of American manufacturing jobs. Prior to their bankruptcy, we used SolarWorld, one of the petitioners in the original trade case, panels. We look forward to the creation of American-made solar cells and modules and will look for ways to include those products when scoping for projects.
Tony Clifford, chief development officer at Standard Solar, may have said it best: “The solar industry is nothing if not resilient, and I’m confident the innovative, tough and resourceful members of the industry will find workarounds to the latest obstacle placed in solar’s path. The Solar Century is here, and not even unfair tariffs will stand in its way.”
Our hearts go out to those who were affected by multiple hurricanes over the past months. We know that the road to recovery is long and daunting, as we are still rebuilding after the devastation caused by Hurricane Sandy five years ago. We also know that you can bounce back stronger and more resilient than before.
Take Ocean Bay Apartments – a 24-building, 1,395-unit complex located in Far Rockaway, New York – which was severely damaged by Hurricane Sandy in 2012 and began redevelopment this year. Among major energy efficiency and storm resiliency measures, over the next year, Bright Power will install a 575 kW solar PV system across 20 buildings.
MDG Design + Construction LLC tells the amazing recovery story in this video.
February 2015 was a big month for news in the renewable energy sector as some of the biggest names in business have made huge investment commitments. It all started with Apple, who early in the month revealed plans to build an $850 million solar farm which will add 130 megawatts of new solar power to California. That’s enough energy to power about 50,000 average homes, or as Apple intends, to cover all of the company’s energy needs across the state. This includes Apple Campus 2, other California corporate offices, the data center in Newark, California, and even the 52 Apple stores in California – that’s a pretty ambitious plan.
Not to be outdone, Google announced via its Google Green Blog that it had agreed to purchase a massive amount of wind energy for its headquarters in North Bayshore as a part of the company’s commitment to being a carbon neutral company. The 24-turbine wind farm will produce 43 megawatts of electricity starting in 2016, which Google believes will offset the entire carbon footprint of their offices.
On the heels of these major announcements, Kaiser Permanente one-upped the competition by signing PPA deals for a total of 153 megawatts of solar and wind energy. Over two decades, Kaiser will purchase 110 megawatts of solar capacity and 43 megawatts in wind, all in an effort to cut half of its electricity consumption in California.
As these corporate titans make major inroads into the renewable energy sector and take on the responsibility of their carbon footprint, they not only boost the domestic renewable energy production and output, but also set the trend for corporate sustainability efforts. Deals such as these three can only be good omens for the future of the renewable energy industry.